When it comes to software developers, companies always seem to need more. The Wall Street Journal’s Steve Rosenbush recently reported that from 2007-2012, the number of software job postings increased by more than 30% while overall postings grew by about 10%. Whether or not that’s the best proxy for actual demand, it indicates companies are reaching out for a coder at roughly three times the rate they search for other skilled professionals. And in a more recent piece Rosenbush added, “High-technology is driving economic growth in a broad range of cities…not just traditional technology hubs such as Silicon Valley and Boston.”
With those two trends in mind and economic growth as an always worthwhile pursuit, let’s take a look at software developer density within Kansas City and 7 other metro areas that are more dense. The point of the comparison isn’t to indicate where Kansas City should aspire to go but, in conjunction with recent positive trends in our region, show us where Kansas City is likely already headed.
The question we’re asking is, What do the demographics look like for those metro areas with a strong software component in their economy? We define a software city here as:
- At least 6 software developers for every 1,000 other kinds of jobs AND
- A Location quotient of of at least 2.
 Averages were pulled for each city from 3 BLS Occupation categories: 15-1132 Software Developers – Applications, 15-1133 Software Developers – Systems Software, and 15-1134 Web Developers. Other IT-related occupations were not included.  The BLS explains Location quotient as the ratio of an occupation’s share of employment in a given area to that occupation’s share of employment in the U.S. as a whole. For example, an occupation that makes up 10 percent of employment in a specific metropolitan area compared with 2 percent of U.S. employment would have a location quotient of 5 for the area in question.
Although the above chart shows Kansas City with a ways to go – basically needing to double the number of software developers per 1,000 jobs — KC does not lag too far behind Portland and Denver, either. And beyond holding its own today, there’s a case to be made that Kansas City is right now in the midst of a significant upswing in software-related job-growth.
If you take a look at the gray bars below (the Y axis employs a logarithmic scale), those are numbers from 2011 Q1-Q3 MoneyTree venture capital data. Compared to the green bars, which represent recent 2013 press releases about investment rounds in local companies (including C2FO announcements), you can see how Kansas City and Des Moines have recently seen significantly more internet-related investment dollars:
 In order to avoid letting financial services, medical devices, biotech, etc. numbers leak in, we constrained our data to just the breakouts under By Internet Related Technology, i.e., the charts only pull from raises recorded with descriptions like these: Ecommerce Goods, Services and Content, Internet Software,Services and Tools, Online Communications,Infrastructure and Hardware, etc.
In the chart above and in two short years Kansas City shows more than a fivefold increase in internet-related venture capital investment. Des Moines has Dwolla headquartered there now, a company that’s been growing like gangbusters and making our whole region look good along the way. And those numbers aren’t including the great rounds that took place in 2012. As we see great investors taking an interest in local companies, and strong companies like EyeVerify, Front Flip, Leap2, and Local Ruckus coming on the scene, new software teams are being created and established ones are getting a chance to expand significantly. It’s an exciting time to be writing software in Kansas City.
Here’s the Excel spreadsheet with the data in the charts in case you find it useful.
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